How to help your children get on the property ladder

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As house prices continue to rise, it seems that with every passing year, it gets tougher to get on the property ladder.

So, what does this mean for them?

Well, it could mean that they end up living at home or renting for much longer than either of you anticipated.

As a parent, it’s possible you could end up helping by paying a significant part of their deposit or stamp duty to help get them on the first step of the ladder.

But, what else can you do to help?

Help them become financially savvy

Helping our children become finance savvy can only benefit them longer term. Savings and budgeting are key especially when you’re a homeowner.

Savings and budgeting

Encourage them to save, save and then save a little bit more.

A useful rule of thumb is to try to save the equivalent of the mortgage repayment they might expect to pay each month.

They’ll also need to understand their current outgoings to identify where they can make savings. Cutting back on nights out, holidays and shopping can, in some cases, result in fairly significant savings. A lifestyle adjustment can be hard, but ultimately worth it in the end.

Upfront and ongoing costs

As a first-time buyer, they will be unfamiliar with the costs associated with buying. They will need to consider stamp duty, mortgage deposit, solicitor fees, survey fees, mortgage arrangement fees, which are all part of the process, when budgeting to buy their first home.

They’ll also have to factor in ongoing costs once they move in. Running a home with costs such as energy bills, broadband, TV licence fees and council tax, as well as home insurance. And it’s always worth having some funds set aside for any home maintenance costs – some of which can come as unexpected.

Mortgages

No matter what, your kids will need some help understanding mortgages, how they work and how to calculate monthly repayments. They’ll face a heap of financial terms, which may be totally alien to them.

Using a mortgage advisor who doesn’t charge fees and can talk through the jargon could certainly help – Move iQ can connect you with professional brokers.

Leverage existing schemes

Let your kids know about government schemes that exist to help people get on the property ladder. These include:

  • Help to Buy Scheme
  • Shared ownership
  • Right to Buy

All these schemes have their differences and not all of them will be suitable based on their eligibility criteria. Nevertheless, they are still worth investigating and pursuing if it suits your circumstances.

Offer your advice

It’s only natural that they look to you for advice and guidance,.

  • Tell them to prepare – have a list of wants and needs in a property. If they cannot afford the area they want to live in, they need not give up the house hunt – they’ll have to learn to compromise!
  • Advise them to do research into the property and the area it’s in. You may find my Property Report useful for this.
  • Offer to accompany them on viewings,if you can, to ensure they ask the right questions. Ensure they go for second viewings.
  • Recommend they regularly review who provides services to their home, and regularly switch for good energy deals, and to make savings on broadband.

As part of a first-time buyer campaign to help lower the age of first-time buyers in the UK, Move iQ has created a set of FREE downloadable guides and checklists to support every step of the home-buying process. Sign up for free and get yours here

Need further advice?

Whether you’re buying, renting, selling, moving or owning, Phil shares his property advice all in one place over on www.moveiq.co.uk

To benefit from Free tickets to UK property and lifestyle shows, useful step-by-step guides and a whole range of practical tools designed to save time and money, sign up to Move iQ for free and enjoy your My Move iQ member rewards.

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